BJ's Wholesale Club Holdings, Inc. (NYSE:BJ) remains well-positioned for long-term growth, according to D.A. Davidson, which sees the company's recent pullback as a potential buying opportunity despite some near-term concerns.

Analyst Maintains Buy Rating

D.A. Davidson analyst Michael Baker maintained a constructive outlook on BJ's Wholesale Club following the company's fourth-quarter results, highlighting several operational strengths despite some investor concerns.

Although the stock has given back part of its roughly 1,100-point year-to-date outperformance, Baker said he would view the weakness as a buying opportunity and reiterated a Buy rating on the shares. The firm raised its price forecast to $114 from $110, based on 24x its 2027 EPS estimate.

Membership And Sales Momentum

Baker pointed to accelerating membership growth as a key positive. BJ's ended the year with just over 8 million members, up from slightly above 7.5 million last year, reflecting stronger growth in both total memberships and members per club.

Comparable sales also improved, with the company delivering its best two-year comp in eight quarters and the strongest three-year stacked comp since the first quarter of 2025.

The mix of higher-tier memberships continued to rise, reaching 42% of members, compared with 39% about 18 months ago.

Baker noted that the figure still trails Costco Wholesale Corp.’s (NASDAQ:COST) roughly 48% executive membership penetration, suggesting further upside. Higher-tier memberships typically increase lifetime customer value and boost membership fee income per member.

Expansion And Outlook

BJ's store expansion strategy remains a central long-term growth driver. With stores in only 21 states, Baker sees significant whitespace for expansion. The company continues to successfully open clubs in both existing and new markets.

Meanwhile, customer traffic increased for the 16th consecutive quarter, reinforcing the strength of the warehouse club model.

Baker acknowledged some concerns, including a 50-basis-point decline in merchandise margins, driven partly by stronger sales in lower-margin consumer electronics.

February sales also started below plan, partly due to weather-related disruptions. In addition, 2026 and first-quarter EPS guidance came in below Street expectations, partly due to higher pre-opening costs tied to new Texas stores.

Still, Baker expects BJ's to continue executing well, citing its history of beating and raising guidance. He now forecasts 2026 EPS of $4.54 and 2027 EPS of $4.79.

BJ Price Action: BJ’s Wholesale Club shares were down 0.85% at $97.63 at the time of publication on Friday, according to Benzinga Pro data.

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